Sandwich Isles Communications, Inc. v. Hawaiian Telcom Inc.

• Court: Court of Appeals for the Ninth Circuit
• Decided: October 22, 2024
• Docket: 23-3520
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS OCT 22 2024 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

SANDWICH ISLES No. 23-3520 COMMUNICATIONS, INC., D.C. No. 1:22-cv-00426-JAO-KJM Plaintiff - Appellant,

v. MEMORANDUM*

HAWAIIAN TELCOM INC.; STATE OF HAWAII, Department of Hawaiian Home Lands; MICHAEL KATZENSTEIN, Trustee,

Defendants - Appellees.

CLEARCOM, INC., No. 23-3531 Plaintiff - Appellant, D.C. Nos. 1:22-cv-00426-JAO-KJM v. 1:22-cv-00428-JAO-KJM

HAWAIIAN TELCOM INC.; STATE OF HAWAII; MICHAEL KATZENSTEIN,

WAIMANA ENTERPRISES, INC., No. 23-3536 Plaintiff - Appellant, D.C. Nos. 1:22-cv-00426-JAO-KJM

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. v. 1:22-cv-00427-JAO-KJM

CINCINNATI BELL INC.; CLEARCOM, No. 24-496 INC.; PA MAKANI, LLC, D.C. Nos. Plaintiffs - Appellants, 1:22-cv-00426-JAO-KJM 1:22-cv-00441-JAO-KJM v.

CLEARCOM, INC.; WAIMANA No. 24-502 ENTERPRISES, INC.; PA MAKANI, LLC, D.C. Nos. Plaintiffs - Appellants, 1:22-cv-00426-JAO-KJM 1:22-cv-00434-JAO-KJM v.

WAIMANA ENTERPRISES, No. 24-501 INC.; CLEARCOM, INC.; PA MAKANI, LLC, D.C. Nos. 1:22-cv-00426-JAO-KJM Plaintiffs - Appellants, 1:22-cv-00435-JAO-KJM

v.

2 23-3520 HAWAIIAN TELCOM INC.; STATE OF HAWAII; MICHAEL KATZENSTEIN,

Appeal from the United States District Court for the District of Hawaii Jill Otake, District Judge, Presiding

Submitted October 7, 2024** Honolulu, Hawaii

Before: MURGUIA, Chief Judge, and GRABER and MENDOZA, Circuit Judges.

Plaintiffs Sandwich Isles Communications, Inc.; Clearcom, Inc.; and

Waimana Enterprises, Inc. appeal the district court’s order affirming various orders

of the bankruptcy court. We have jurisdiction under 28 U.S.C. §§ 158 and 1291.

When reviewing an appeal from a bankruptcy court, we review the bankruptcy

court’s decision independently and do not give deference to the district court’s

determinations. Bunyan v. United States (In re Bunyan), 354 F.3d 1149, 1150 (9th

Cir. 2004). “The bankruptcy court’s conclusions of law and interpretation of the

Bankruptcy Code are reviewed de novo.” Id. We review the bankruptcy court's

factual findings for clear error. Hedlund v. Educ. Res. Inst. Inc., 718 F.3d 848, 854

(9th Cir. 2013). We review the bankruptcy court’s interpretation of its own sale

orders for abuse of discretion. See Rosales v. Wallace (In re Wallace), 490 B.R.

** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2).

3 23-3520 898, 906 (B.A.P. 9th Cir. 2013) (holding that a reviewing court “accord[s]

substantial deference to the bankruptcy court’s interpretation of its own orders and

will not overturn that interpretation unless we are convinced it amounts to an abuse

of discretion” (citing Hallet v. Morgan, 296 F.3d 732, 739–40 (9th Cir. 2002))).

We affirm.

The bankruptcy court did not abuse its discretion when it interpreted its own

orders for sales—from Sandwich Isles Communications to the Trustee, and from

the Trustee to Hawaiian Telecom—to include, as one of the purchased assets, an

interest in License No. 372, a license to provide telecommunications service on the

Hawaiian Home Lands (“the License”). See In re Wallace, 490 B.R. at 906. To

the extent that Plaintiffs argue that the sales did not include the License, we reject

that argument because the record contains convincing evidence supporting the

bankruptcy court’s interpretation. See Or. Nat. Res. Council v. Marsh, 52 F.3d

1485, 1492 (9th Cir. 1995), as amended on denial of reh’g (June 29, 1995)

(holding that a court abuses its discretion when the record contains no evidence to

support its decision). For example, the settlement agreement defines the

transferred property rights as specifically including Sandwich Isles

Communications’ interest in the License.

To the extent that Plaintiffs challenge the underlying sales on their merits,

arguing, for example, that the debtor obtained only a right to use the License, or

4 23-3520 that state law prohibited the transfer to buyer Hawaiian Telecom, those arguments

are an impermissible collateral attack on the underlying sale orders, which were

not timely appealed. We therefore decline to consider those arguments.1 See

Travelers Indem. Co. v. Bailey, 557 U.S. 137, 152, 154 n.7 (2009) (explaining that

the bankruptcy court’s order became res judicata once it became final on direct

review); Robertson v. Isomedix, Inc. (In re Int’l Nutronics, Inc.), 28 F.3d 965, 970

(9th Cir. 1994) (holding that “a bankruptcy court’s order confirming a sale has

preclusive effects”).

Clearcom’s appeal of the bankruptcy court’s April 22, 2022, order was

timely, because that order was not final when it was entered. See, e.g., SEC v.

Elmas Trading Corp., 824 F.2d 732, 732 (9th Cir. 1987) (“Orders of civil contempt

entered against a party during the course of a pending civil action are not

appealable until final judgment.”); Donovan v. Mazzola, 761 F.2d 1411, 1416–17

(9th Cir. 1985). On the merits, we conclude that the bankruptcy court did not

clearly err in finding that the spare reels were property of the bankruptcy estate of

Paniolo Cable Company LLC, and did not abuse its discretion in finding that

Plaintiffs violated the bankruptcy court’s prior turnover order. See FTC v.

Affordable Media, LLC, 179 F.3d 1228, 1239 (9th Cir. 1999) (stating standard of

1 For the same reason, we also decline Sandwich Isles Communications’ request that we certify a question to the Hawaii Supreme Court.

5 23-3520 review and standard for finding a party in civil contempt). Both there and here,

Clearcom failed to identify convincing evidence showing that the reels belonged to

it and, instead, lodges only conclusory and unsupported assertions of ownership.

Plaintiffs assert with respect to adversary proceeding No. 22-90008, which

alleged state-law tort claims, that the underlying sale orders did not transfer an

interest in the License. For the reasons stated above, we disagree. In their opening

briefs, Plaintiffs otherwise provide no argument that the bankruptcy court erred in

concluding that res judicata barred that adversary proceeding. To the extent that

the reply briefs can be interpreted to assert alternative arguments, we do not

consider matters not specifically and distinctly raised and argued in the opening

brief, or arguments and allegations made for the first time on appeal. Padgett v.

Wright, 587 F.3d 983, 985 n.2 (9th Cir. 2009) (per curiam). Accordingly, any such

arguments are forfeited. See, e.g., Terpin v. AT & T Mobility LLC, No. 23-55375,

2024 WL 4341368, at *5 (9th Cir. Sept. 30, 2024) (holding that an appellant

forfeits an argument by failing to raise it specifically and distinctly in the opening

brief).

We have carefully reviewed and considered all the arguments made in favor

of reversal, and we see no reversible error.

AFFIRMED.

6 23-3520